VSP, the nation’s largest vision care plan is at a crossroads. Although still the number one vision benefits plan in the United States, more nimble competitors have seemingly shrunken the gap it once had over its competition. Wonder has turned to concern when a giant employer, IBM, chose a competitor over VSP.
Like a classic case study in business strategy in business school. VSP either has an organizational effectiveness issue or its business strategy requires a remake. First, it could become a much leaner organization both in its organization and in its governance. Second it could compete head-to-head with its competitors. Third, it could expand to international markets. Lastly, it could strike out in a totally new direction into a totally different market.
In the first, the mission value would have to change, a counter intuitive move that might be hotly debated. In the second, VSP has much ground to make up on its competition and as it tries to respond rather than “make the market”. In the third, the prepaid vision benefits have must compete with more socialized health care systems that already have an apparatus in place for eye care. In the last, VSP could delve into its core competency of information technology, for which it is an acknowledged leader in logistics and claims processing.
Specifically and uniquely, VSP could transform itself into the “Amazon of claims processing and optical logistics”. Few in the public realize that a substantial portion of Amazon’s business comes from its fulfillment activity. Likewise, VSP could develop further its claims processing skill to become the primary gateway for claims and laboratory order processing for which it has made significant inroads through Eyefinity. While VSP might lose in the vision benefits war, it has no reliable competition in automated claims and laboratory processing. In fact, it’s not farfetched that VSP can quickly create a nationwide vision information exchange (like a health information exchange) that can facilitate eye information sharing.
It’s revolutionary to think that VSP might not be in the vision benefits business. They were the first to make this kind of business viable and profitable. However, the market and economic changes have changed dramatically since those early days. Would such a dramatic new direction hurt VSP, its panel doctors, and its current customers? It’s likely, but already, its good will amongst its community has diminished in its battle to compete head on with others. Maybe a new direction might open new possibilities.
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